Senate sends customs bill with Internet tax ban to Obama

The Senate passed a customs enforcement bill Thursday paving the way for it to hit President Obama’s desk.

Senators voted 75-20 on the legislation, which had stalled because of a fight over an Internet tax ban.

{mosads}Sens. Orrin Hatch (R-Utah) and Ron Wyden (D-Ore.), who helped spearhead the legislation, praised the Senate’s move, with Hatch saying it marks “a major step forward” to bolster U.S. interests in international trade.

“This bill is about coming down hard on the trade cheats who are ripping off American jobs, and the truth is past trade policies were often too old, too slow or too weak for our country to fight back,” Wyden added.

The measure includes an overhaul of the U.S. Customs and Border Protection agency, as well as new protections for intellectual property and more tools for the government to crack down on currency manipulation.

But both Republicans and Democrats bucked the customs bill because it includes an extension of the ban on Internet access taxes, which they argue was “airdropped” in during the House-Senate conference committee.

Sen. Lamar Alexander (R-Tenn.) suggested that his colleagues had developed “amnesia.”

“According to the Republican conference rules, the Senate Republican Congress believes that Congress should not create new federal unfunded mandates on state and local governments. However, the vote today that we’re about to cast breaks that promise,” he said Thursday.

The Senate had originally hoped to pass the customs bill last year, but had to punt it after Sen. Dick Durbin (D-Ill.) pledged to either block the legislation over the Internet tax fight or try to remove the provision.

However, he said earlier this week that he was allowing it to move forward after getting a deal from Majority Leader Mitch McConnell (R-Ky.) to move separate legislation this year to allow states to collect sales tax from Internet retailers.

Supporters of the Internet tax ban argue the customs bill is their best shot at getting the policy into law. Sen. John Thune (R-S.D.) warned Thursday that the House wouldn’t pass the customs legislation again if the Senate tried to change it, which would require it to go back to the House.

The customs legislation also split Senate Democrats, with Minority Leader Harry Reid (D-Nev.) calling it a “half measure” and the latest in a series of “missed opportunities.”

“The conference report on customs misses the opportunity to take strong action against currency manipulation,” he said. “It throws up unnecessary agreements on climate change.”

Democrats echoed Reid’s concerns that the conference committee had watered down the Senate’s version of the customs enforcement bill.

”I like that [Senate] version, and that strong language on currency manipulation,” Durbin said. “The conference report that’s back to us now and before the Senate at this moment is a much different bill.”

The House easily passed the customs enforcement legislation last year even though only 24 House Democrats supported the measure.

Outside groups also pressured the Senate to pass the customs legislation ahead of Thursday’s vote.

The U.S. Chamber of Commerce, the National Retail Federation and the National Association of Manufacturers sent key-vote letters to senators on the customs measure, urging them to back the legislation.

Jay Timmons, the president of the National Association of Manufacturers, said, separately, ahead of Thursday’s vote that “if senators want to grow manufacturing in the United States, then they should pass this bill immediately.”